Bond traders are about to get hit with reality after cruising through this week's wild market swings. Here's the thing: yield spreads on US investment-grade corporate debt just hit their tightest levels in roughly 30 years. That's not background noise—it's a warning sign. When credit premiums compress this hard, it usually means investors are pricing in way too much optimism about the future. History shows these compressed spreads don't stick around. The unwinding can be brutal. So while everyone celebrated getting through the volatility without major scars, the real test is coming. Tighter spreads leave almost zero margin for error when sentiment shifts. Any sign of economic stress, earnings misses, or Fed policy surprises could trigger a sharp repricing. Credit markets are essentially saying we're living on borrowed confidence right now.